Ericsson received its first order for a manual switch from the Indian government in 1903. At this time, India was a British colony, and Ericsson had very successful sales in Great Britain. It was thus appropriate that the sales office in Calcutta was opened by Ericsson's British company. For a long time, this was one of just two sales offices in all of Asia. The other was located in Indonesia. Not until the mid-1960s were sales offices opened in other Asian countries, such as Thailand and Malaysia.
In the early 1970s, when India had been an independent country for some time, a jointly owned production company, Ericsson India Pty Ltd, was formed that sold manual switching equipment to customers that included the Indian defense authorities.
The current Ericsson company, the wholly owned Ericsson Communications, was formed in 1996. At this time, the mobile telephone market was being rapidly deregulated, and many foreign experts were employed to enable the company to meet the competition. Over time, these employees left the company and were replaced by local workers, since the level of technical education in India is high.
Ericsson has enjoyed considerable success with AXE in India. It is the country's most widely used digital switching system. Since 1993, AXE systems for the Indian market have been assembled in a plant in Kukas, Rajasthan. Capacity is 600,000 lines a year.
Ericsson signed the first GSM contracts with India in 1994 for networks in the three largest cities of Delhi, Bombay and Madras. Ericsson has supplied about half of some 40 Indian GSM networks. The country has never had an analog mobile telephone system, but instead started out with the digital GSM system.
By the turn of the century, Ericsson's operations in India included 700 employees at 13 locations throughout the country and with head offices in Delhi. Business operations comprise sales and marketing of infrastructure, installation and service, customer training, software development and distribution of mobile phones.
Telephone penetration in the country, which has a population of one billion, is less than two percent, as measured in the number of lines. In Sweden, telephone penetration is nearly 80 percent. This says something about the potential for Ericsson to expand its business in India.
